Class 12 Economics – Rural Development (MCQ Mock Test)

Test Your Understanding of India’s Rural Economy with Our MCQ Mock Test!

How well do you understand the backbone of India’s economy — the rural sector? Strengthen your concepts with this MCQ-based mock test on Rural Development, designed as per the latest Class 12 Economics syllabus (2025–26). This test covers all essential topics — the meaning and importance of rural development, agricultural credit, role of cooperatives, microfinance, self-help groups (SHGs), and the importance of infrastructure in rural areas.

Each question is carefully designed to help you recall important facts, apply economic reasoning, and analyze policies related to rural growth. Perfect for exam revision and concept clarity, this mock test ensures thorough preparation for both school and board exams.

Attempt now and enhance your understanding of Rural Development – the heart of India’s economic progress!

1. Assertion (A): In 1982, India adopted social banking approach.

Reason (R): Moneylenders were charging high rate of interest from poor people and manipulate their account.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

2. Which of the following is a crucial area of improvement for rural banking?

Risk protection for small businesses

Profitability of non-farm activities

Culture of deposit mobilisation

Sustainable development

3. Statement 1: The SHGs promote thrift in small proportions by a minimum contribution from each member.

Statement 2: From the pooled money, credit is given to the needy members to be repayable in small instalments at reasonable interest rates.

Statement 1 is true and statement 2 is false

Statement 1 is false and statement 2 is true

Both statements 1 and 2 are true

Both statements 1 and 2 are false

4. Organic farming is beneficial because:

it reduces damage to environment.

it is produced in an environmentally sustainable way.

it provides healthy food.

All of these

5. Father of Green Revolution in India is:

MS Swaminathan

Norman Borlaug

Chidambaram Subramaniam

PC Mahalanobis

6. Fish production from inland sources contributes about ___________ per cent to the total fish production and the balance ___________ per cent from main sector.

51; 49

75; 25

65; 35

25; 75

7. Identify the incorrect statement from the following:

Horticulture has emerged as a successful sustainable livelihood option for farmers in India.

Horticulture is an important sector for potential diversification and value addition in agriculture.

Indian is blessed with supportive climatic and soil conditions for horticulture.

Horticulture is the business related to producing, storing and distributing food grains.

8. Assertion (A): In 1982, NABARD was set up.

Reason (R): NABARD helped improvement in institutional credit to satisfy rural needs.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

9. Organic farming is needed because it:

maintains and enhances the ecological balance.

is free from chemical based fertilizers.

Both (a) and (b)

Neither (a) nor (b)

10. ‘Kudumbashree’ is a women-oriented community-based poverty reduction programme being implemented in:

Kerala

Karnataka

Tamil Nadu

Maharashtra

11. A process that involves the assembling, storage, processing, transportation, packaging, grading and distribution of different agricultural commodities across the country is known as _____________.

Agricultural Diversification

Agricultural Banking

Agricultural Management

Agricultural Marketing

12. Which of the following is false regarding NABARD?

It helps farmers directly.

It performs all the functions of RBI with regards to agricultural credit.

It helps the flow of credit through co-operatives, RRBs etc.

It maintain a research and development fund to promote research in agriculture.

13. Name the state which is held as a success story in the efficient implementation of milk cooperatives.

Maharashtra

Jammu and Kashmir

Gujarat

Andhra Pradesh

14. __________ is the branch of agriculture deals with breeding, rearing and caring of farm animals.

Livestock farming

Horticulture

Golden revolution

None of these

15. Following are the major producers of marine products in India except:

Gujarat

Punjab

Kerala

Maharashtra

16. Identify the incorrect statement from the following:

Diversification in agriculture sector provides sustainable livelihood rural population.

Diversification includes change in cropping pattern, shift of workforce from agriculture to other allied activities and non-agriculture sector.

Objective of investment in new agricultural avenues (non-farm activities) increases financial risk for rural population.

Diversification reduces the proportion of unemployed population in the rural areas to considerable limits.

17. “Co-operative marketing societies have faced a downfall in the recent years.” Identify which of the following was not a reason behind its downfall.

Lack of co-ordination between processing and marketing societies

Inefficient financial management

Inadequate coverage of all the members

Intervention of the government is most essential

18. Identify the incorrect statement from the following:

Diversification into other sector is essential to enable rural people to overcome poverty.

Diversification provides supplementary gainful employment.

Diversification activities are not beneficial.

19. The Father of White Revolution in India is:

MS Swaminathan

Norman Borlaug

Dr Varghese Kurian

None of these

20. White revolution is associated with:

Horticulture

Fisheries

Dairying

Animal husbandry

21. Statement 1: Prior to independence, farmers, while selling their produce to traders, suffered from faulty weighing and manipulation of accounts.

Statement 2: Farmers who did not have the required information of prices prevailing in markets were often forced to sell their produce at low prices.

Statement 1 is true and statement 2 is false

Statement 1 is false and statement 2 is true

Both statements 1 and 2 are true

Both statements 1 and 2 are false

22. Diversification in agriculture activities means finding alternate employment in:

Non-farm sectors

Urban Sectors

Rural sectors

None of these

23. Assertion (A): Rural development in India is of key significance.

Reason (R): Nearly two-third of population in India is dependent on agriculture.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

24. Observe the given image carefully and identify the diversified rural activity from the alternatives given below.

Animal Husbandry

Horticulture

Livestock farming

Jaggery making

25. Which of the following is not a non-institutional source of credit in India?

Moneylenders

Traders

Commission agents

Commercial banks

26. Observe the given image carefully and identify the organisation/scheme related with given logo from alternatives given below.

NABARD

Micro-credit Programme

Sansad Adarsh Gram Yojana

Jan Jhan Yojana

27. Kavitha, a farmer in rural India, is a recipient of a government scheme named __________. This scheme helps her set up a bank account and provides

insurance, overdraft and other social security benefits.

Sansad Adarsh Gram Yojana

Jan Dhan Yojana

Kudumbashree

NABARD

28. “In order to reduce over-dependence on agriculture sector, it is necessary to opt for diversification.” With reference to the government, diversification includes:

(i) Change in cropping patten

(ii) Shift of workforce from agriculture to allied activities

(iii) Shift of workforce from agriculture to nonagriculture sector

Alternatives:

(i) and (ii)

(i) and (iii)

(ii) and (iii)

(i), (ii) and (iii)

29. Non-farm areas of employment are:

Animal husbandry

Fisheries

Horticulture

All of these

30. Statement 1: Change in cropping pattern is a form of diversification of farm activities.

Statement 2: Most agricultural activities are seasonal in nature.

Statement 1 is true and statement 2 is false

Statement 1 is false and statement 2 is true

Both statements 1 and 2 are true

Both statements 1 and 2 are false

Question 1 of 30